On Apr. 19 the European Parliament voted overwhelmingly to bring cryptocurrencies under “closer regulation”. How does that affect Europe’s place in the blockchain world?
The experts weigh in.
“Although the European Commission is active in terms of declarations, partnerships, and alliances, at the end of the day that is not what is needed in order for a sector to flourish. Generally speaking, technology leaps tend to happen within smaller companies, however, the European Commission’s current approach tends to favor larger corporations, which in turn makes innovation within these smaller businesses more difficult.
“Initiatives like the General Data Protection Regulation, while desirable from the user perspective, are almost impossible to comply with for small companies trying to twist the limits of technology with scarce resources. On top of that, despite some laudable efforts, regulation that affects the blockchain is still fragmented, increasing the uncertainty and over costs for business.
“Despite the European Commission’s recent embrace of blockchain, the region has been fighting for its place as an industry frontrunner for some time now and multiple hubs are beginning to emerge within Europe. Switzerland, the most notable of these hubs, has provided businesses with certainty and a clear legal framework that has attracted many major actors in the space. Most of the other locations are small jurisdictions that have acted on their own and established competitive legal frameworks. It is very admirable to see regions like Gibraltar or Malta that are fighting hard to attract new blockchain companies and to assist in the relocation of existing ones.”
Fernando Gutierrez, chief marketing officer at Dash
“We welcome Mr. Ansip’s favorable stance on the future of blockchain technology within the borders of the European Union. The question of blockchain’s potential to usher in and support a new age of decentralized world economy is not a matter of ‘if’, but ‘when’. With headquarters in Zug, Switzerland and contractor offices in Berlin, Germany, we at Lisk are lucky to experience the humble beginnings of the global blockchain disruption first hand, both inside and beyond the borders of the European Union. Appropriate, well thought out regulation is key to a mature blockchain industry. Therefore, we’re happy that the largest regional legislative body is on our side.”
Thomas Schouten, senior spokesperson for blockchain application platform Lisk
“It’s a great sign when 22 countries in the European Union agree to move forward together, especially in technology and an emerging industry like ours.
“Blockchain technology has been approached with caution, but recently, new actions towards regulation across the globe have helped the industry evolve as a whole. Joint cooperation across Europe is sure to bring with it advantages and breakthroughs that could be game changers in many industries.”
Nick Cowan, CEO of the Gibraltar Blockchain Exchange
“Most of the Venture Capital funds in this technology area are American based, which leads to a halting effect in investment in Blockchain and Distributed Ledger Technology in Europe. The European Union (EU) already has a good foundation of tech companies but there is no EU wide network and strategic framework to look at financing Research & Development (R&D) in Blockchain technology. Where the EU could assist would be to give a steer in terms of the key areas where investments can be made and R&D supported and deployed across the EU.
In some respects the EU is ‘late to the party’, considering the leading Blockchain and Distributed Ledger Technology (DLT) initiatives taking place are in jurisdictions such as Australia, Asia, and Switzerland. We would recommend following the example of other leading countries such as the US who have established and advanced VC and Blockchain networks.
One positive development within the EU is the focus on the Blockchain industry by the European Investment Bank (EIB) through Horizon 2020 – their new request for funding specifically out calls for investment in Blockchain and DLT. For this to deploy properly there needs to be EU wide alignment of Blockchain strategy from the EU Institutional level all the way down to the National and the Regional level.
If the 22 EU countries in question want to have a successful Pan-European Blockchain tech network then the EU need a joined-up EU framework that leading technology DLT providers can plug in to.”
Shane Brett, co-founder, and CEO of GECKO Governance, a regtech regulatory solution for bank and fund financial compliance
“Europe is strategically placed to take advantage of the blockchain innovation explosion. While the chairman of the SEC worries about protecting US investors who don’t need his protection, Americans rightly complain that they are being left out. Those of us in Europe are designing new business models, inventing the future of money, transforming supply chains, building new reg-tech and legal-tech platforms, and finding ways to create more resilient economies.
It is a unique time to invest in European talent and entrepreneurship, and I applaud the EU for helping to lead the charge. At the same time, the coming GDPR regulations are far too heavy handed and impractical – they will create administrative busywork that don’t protect consumers. They had a chance to put sensible guidelines in place and try to go after the bad actors, but instead, they penalize everyone for doing business as usual and taking reasonable precautions.
I hope Europe doesn’t follow the US in financial regulation, and I hope the US doesn’t follow the EU in data and privacy regulation.”
David Siegel, founder, and CEO of the Pillar Project